Set up a new garnishment

Some options on this page cannot be reversed after they are saved. If the options are incorrect, you must delete the garnishment and add a new garnishment with the correct options.

If the garnishment order indicates that amounts are to be paid based on a specific frequency that differs from your payroll frequency, contact the garnishor to have a new order issued based on amounts that are appropriate for the payroll frequency.

Sample garnishments for reference

Federal , Support BC, Support Ontario

1. Click the Pay Period menu and click the Enter button for the pay period you want to work with.

2. Open the Garnishments page. From the Payroll menu, select Garnishments.

3. From the Employee List, select the employee to which you want to add a garnishment.

4. Click the Add New Garnishment button. The Garnishment Set Up page opens and displays the Garnishment Type Selection section.

5. Select the Garnishment Type based on the garnishment notice. Powerpay may display multiple selections for the same type. Select the lowest numbered option available for the garnishment type.

6. Click Next.

   Powerpay displays the fields relevant to the selected garnishment type.

7. Enter the information for the employee’s new garnishment. Fields marked with a red asterisk (*) are mandatory. Click remove to view additional information on selected fields.
   For more information on completing the garnishment set-up, refer to the Field Information below or see the Garnishment Tutorial.

   For more information, see Important information for adding a new garnishment.

8. Click Save.

9. Go to the Garnishments page. From the Payroll menu, select Garnishments. to view the details of the garnishment in the Active Garnishment List.

• Select a Garnishment Type - This field appears after you click Add New Garnishment button on the Garnishments page. From the Select a Garnishment Type list, select a garnishment type, and if the employee has more than one garnishment, a numbered instance within the type.

  • Federal - You can create 2 Federal garnishments in Powerpay.
  • Provincial - Provincial garnishments are issued when an employee’s creditor wins a judgement in small claims court or provincial/divisional court to garnish the employee’s wages to pay a debt. They cannot be issued directly by the creditor. The provincial government is responsible for tracking garnishments issued by small claims court. Each province/territory has a law that indicates the percentage of the employee’s wages or a minimum amount that cannot be garnished.
  • Support - Family courts issue Support and/or Maintenance Orders to ensure that employees pay child and/or spousal support. This includes arrears orders. Employers must enforce and remit payments for orders from other provinces and other countries. Support and/or Maintenance Orders are usually a fixed monthly amount deducted on a continuing basis. They may have an additional deduction for payments in arrears. Note that minimum subsistence amounts for regular and arrears payments vary by jurisdiction. You can create up to 4 Support garnishments in Powerpay.

• Garnishment Type - The type of garnishment (support, federal or provincial).

• Employee's Current Province of Employment - The province the employee is currently employed in.

• Payable to - The name of the individual, institution or government agency to which the garnishment is payable (the claimant). (Maximum 30 characters)

• Street, City, Province/State, Postal/Zip Code- The full address of the claimant.

• Order Number - The order number that appears on the garnishment order. If the employee’s Garnishment/State in the Payee Information section is Ontario with any Support garnishment 1 – 4, enter the order number in the format: 0 followed by 6 digits (for example, 0654321).

• Order Issue Date - The order issue date may be used to calculate an employee's exemption amount. It is required to ensure the date is available when exemption amount calculations are changed for specific garnishment types and/or provinces of employment

  • Quebec - For federal garnishments, issued to employees whose province of employment is Quebec, Powerpay accommodates exemption rates applied to federal, provincial and support garnishments, issued on or after January 1, 2016. The old exemption rates apply to garnishments issued before January 1, 2016.
  • Northwest Territories - Powerpay calculates support garnishments, issued to employees whose province of employment is Northwest Territories, based on when the order was issued, before or after July 1, 2009. This distinction ensures the correct amount is deducted for the garnishment.
  • Nunavut - When calculating exemption amounts for garnishments in Nunavut, Number of Dependents is not used in the calculation of an exemption amount for a support garnishment, and Marital status is not used in the calculation of an exemption amount for federal or provincial garnishments.

  • Saskatchewan - For employees, whose province of employment is Saskatchewan, Powerpay calculates federal and provincial garnishments based on the formula when the order was issued, before or after May 28, 2012.

• Straight Dollar Amount - A set dollar amount.

• % of Gross Earnings less Statutory Deductions - A calculated percentage of the employee's gross earnings minus statutory deductions.

  Note: If you select this option, do not enter a Value Per Pay greater than 100%.
  

• % of Gross Earnings less Statutory Deductions and Union - A calculated percentage of the employee's gross earning minus statutory deductions and union fees.

  Note: If you select this option, do not enter a Value Per Pay greater than 100%.
  

• % of Gross Earnings up to Provincial Subsistence Maximum - A calculated percentage of the employee's gross earning up to the Provincial Subsistence maximum amount. This selection ensures the amount deducted does not exceed the Provincial Subsistence Maximum amount for that employee’s province. If the garnishment amount results in the garnishment deduction exceeding the Provincial Subsistence Maximum amount, Powerpay only deducts an amount up to that maximum.

  Note: If you select this option, do not enter a Value Per Pay greater than 100%.
  

• Garnishment Value becomes the employee’s Net Pay - Use this calculation method when the garnishment order dictates that the employee be left with a specific amount of net pay and the remainder is to applied to the garnishment deduction. Garnishment Payee = Any Company Ltd., and employee John Doe has a Garnishment Value Per Pay amount of $500.00 and a net pay of $1,100.00, then cheques will be issued to John Doe for $500.00 and to Any Company Ltd. for $600.00.

  Important: If you select this option, you must also select the Do not apply minimum subsistence rules option.

• Employee’s Net Pay becomes the Garnishment Value - The employee's entire net pay is the amount of the garnishment. Select this option when the garnishment order indicates that the garnishment cheque is to be for the employee’s entire net pay. The order generally indicates that, upon termination, the employee’s entire net pay is to be payable to the garnishor. This requirement is applicable in some cases to garnishment orders issued by CRA. If using this selection, the Value Per Pay is usually set to 100(%).

  Important: If you select this option, you must also select the Do not apply minimum subsistence rules option.

  Note: If you select this option, do not enter a Value Per Pay greater than 100%.
  

• Garnishment Value Per Pay - The dollar amount or percent deducted per pay. A $ sign appears in front of the amount if the value represents a dollar amount. A % sign appears after the amount if the value represents a percentage.

  Note: Do not enter a negative amount in this field.

• Termination Requirements - Select the Yes or No to indicate whether the garnishment order indicates that the employee's entire net pay should be garnished upon termination.

• Source of Garnishment Order - This field displays for employees with a province of employment of Nova Scotia for federal or provincial garnishments. It is used to determine if the calculation for federal or provincial garnishments is based on a small claims court judgment.

• Marital Status - The employee's marital status (married or single).

• Number of Dependents - The number of dependents (if any) the employee has. The number of dependents is based on the number of children and, in most cases, would not include the spouse as a dependent.

• Minimum Subsistence Rules - Typically, Provincial and Support Garnishment calculations use the minimum subsistence regulations as part of the calculation to ensure the employee is left with the legislated minimum subsistence amount. The Minimum Subsistence Rules apply unless the order states otherwise.

  The entire amount (% or dollar) in the Value Per Pay box is only deducted if it complies with these rules. If the calculation would result in the deduction being greater than the amount allowed under the minimum subsistence rules, only the portion of the garnishment deduction up to the allowable amount would be taken.

  Federal garnishments do not usually apply subsistence rules. The government usually requires the % or $ amount specified in the order. For this reason, the Do not apply minimum subsistence rules option is selected by default when you add a new Federal garnishment. You can change this option.

• Apply minimum subsistence rules - Ensures that the garnishment calculations use the minimum subsistence regulations to ensure the employee is left with the legislated minimum subsistence amount. The amount (% or dollar) in the Value Per Pay box is only deducted if it complies with these rules. If it is greater than the amount allowed under the minimum subsistence rules, only the portion of the garnishment deduction up to the allowable amount is taken.

• Do not apply minimum subsistence rules (0 amount will be assumed) - The garnishment calculations do not use the minimum subsistence regulations to ensure the employee is left with the legislated minimum subsistence amount. The amount (% or dollar) in the Value Per Pay box is deducted even if it does not comply with the minimum subsistence rules.

• Apply new subsistence amount - Enter the new subsistence amount. The garnishment calculations follow the minimum subsistence regulations with the new subsistence amount.

  Note: Do not enter a negative amount in this field.

  Note: Do not enter ‘0’. If ‘0’ is required, select Do not apply minimum subsistence rules (0 amount will be assumed).

  Important: If you select this option, do NOT enter an amount in the Standard Monthly Target Amount box in the Target Information section.

• For the Monthly Target Amount only do not apply minimum subsistence rules - The garnishment calculations will not follow the minimum subsistence regulations for the Monthly Target Amount only.

• No Target Amount required - This option is rarely used. Select this option when no target amount has been indicated in the garnishment order. After setup in Powerpay, the garnishment is deducted each pay period. If you select this option, you must remember to delete the garnishment when the garnishment order requirements have been satisfied.

• Reducing Target Amount required - Select this option to indicate that there is an amount owing on the garnishment.

• Original Target Amount - The Reducing Target Amount originally entered when the garnishment was added.

• Remaining Target Amount - The balance of the garnishment to be paid after the garnishment on the previous payroll run has been deducted. As the deduction continues, this amount decreases. When it reaches 0, the deduction automatically stops.

• Monthly Target Amount required - Indicates that a standard target amount should be deducted each month. The order indicates what the Value Per Pay amount should be.

• Standard Monthly Target Amount - The standard target amount to be deducted for every month.

• First Month's Target Amount - If the First Month’s Target Amount is different from the Standard Monthly Target Amount, enter it in this field. This occurs with biweekly payrolls when the garnishment deduction begins on the second pay of the month. After the payroll is processed, the First Month’s Target Amount field is no longer displayed.

  Note: If no amount is entered in the First Month’s Target Amount, Powerpay uses the amount entered for the Standard Monthly Target Amount.
  Note: Important! Choose Target Information options carefully based on the information provided in the employee’s garnishment order. After options in section have been saved, they cannot be reversed. If the options are incorrect, you must delete the garnishment and add a new garnishment with the correct options.

• If you are to notify the garnishor when there is an interruption in earnings that prevents a payment.
• If the garnishment order indicates that the employee’s entire net pay (100%) is to be garnisheed upon termination.

• The date the garnishment was put into effect.

• If the employee is subject to an administration fee.

• A Stop Order form is required before the garnishment can be deleted.

Powerpay does not use this information.